President Cyril Ramaphosa says the decrease in South Africa's gross domestic product (GDP) during the second quarter of 2020 reflects the severe impact of the global coronavirus pandemic on the economy and should spur all South Africans to do all they can to help rebuild the economy. The president has listed three processes that are underway for economic recovery.
"While the 16.4% contraction in the second quarter (or 51% on an annualised basis) represents an anomaly due to the lockdown imposed at the end of March, these figures nevertheless reinforce the importance of enabling a strong rebound in subsequent quarters," the presidency said in a statement on Tuesday 8 September.
THREE PROCESSES FOR ECONOMIC RECOVERY
Ramaphosa said now is the time to act quickly and boldly to place South Africa on a rapid growth trajectory.
"We cannot continue with business as usual. We will use this moment of crisis to build a new economy, and unleash South Africa's true potential," he said.
According to the presidency, three important processes are underway to support economic recovery.
Social partners will soon present a Social Compact on Economic Recovery to Ramaphosa following discussions at the National Economic Development and Labour Council. This social compact identifies areas of convergence and provides a basis for joint action by all partners;
- Government will thereafter finalise its Economic Recovery Strategy, which will draw on this social compact and outline a clear, action-oriented plan to stimulate economic growth and enable a rapid rebound.This strategy will include fast-tracking urgent structural reforms, expanding employment programmes, facilitating large-scale investment in infrastructure projects, and implementing measures to promote localisation and enhance regional and continental trade; and[*]Finally, the Presidential Employment Stimulus will commence implementation within the next month and will expand opportunities through public and social employment to counteract job losses.
Ramaphosa will make further announcements in this regard in due course. He has called on all sectors of society to act with unity and purpose to rebuild the economy for the benefit of all South Africans.
RAMAPHOSA FOCUSES ON THE ECONOMY
Having acted swiftly and decisively to save lives and bring the epidemic under control, government's focus now is on economic recovery.
The presidency said the R500 billion emergency relief package announced by Ramaphosa in April has prevented the worst effects of the pandemic.
Over R40 billion has been paid to more than four million workers through the Unemployment Insurance Fund (UIF) to prevent retrenchments, and more than five million beneficiaries have received the Special COVID-19 Grant for Social Relief of Distress.
"A total of R25 billion has been paid through top-ups to existing social grants, as well as, an additional Caregivers Allowance for recipients of the Child Support Grant," it said.
Moreover, tax relief worth over R70 billion has been extended to businesses in distress. These and other measures have provided necessary relief to vulnerable individuals and businesses across the country.